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Interop 2008 We've seen more than enough folks all atwitter and wetting their shorts over cloud computing at Interop 2008 Las Vegas. So it was a bit of a surprise to catch a panel at the show with Google and Amazon reps discussing what keeps businesses from embracing the technology.

The four-man panel, moderated by BitCurrent analyst Alistair Croll, took a much more grounded approach to the subject than what usually occurs when an opposing faction in the IT world isn't in the discussion.

The panel agreed that adoption rate of cloud services is growing, but there are major issues that need to be smoothed out before big businesses will truly consider moving mission-critical applications out of house. If they ever do. Number one on that list is security.

"I don't think the equipment inside the data center — especially large ones — is going away any time soon," said Kirill Sheynkman, CEO of start-up Elastra. "Basically I think there are data that belongs in the public cloud and data that needs to go behind a firewall. There are data that belong there and data that will never be put out there. Period. Not going to happen. Because no matter how you encrypt it, no matter how you secure it, there will be concerns."

Cohen went on to stress that giving IT departments control over what stays in and what goes out needs to be well thought out.

"And that also brings up a roadblock, which is interoperability," said Sheth. "The more we can figure out ways for systems that are in the private cloud — behind the firewall — to interoperate with systems that are in the public cloud, the more useful for businesses these systems will become."

Amazon Web Services Technology Evangelist Jinesh Varia concured that opening the platform has been a major focus for his company.

Other issues slowing adoption of web-hosted services include application licensing complexity, wrangling code to work over the grid — and here's one that stuck out: compliance.

When asked what happens when government auditors come knocking to check the regulatory complicity of an application living in the cloud, nobody seemed to know the answer. The question was clearly moving into theoretical territory at this early stage of the technology.